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. Last Updated: 07/27/2016

Business in Brief

Gold Reserves Hit Record

Foreign currency and gold reserves rose by $2.7 billion to a record $149.6 billion in the week ending June 24, as high oil prices allowed exporters to bring more revenue home.

The reserves increased by $400 million to $146.9 billion in the week ending June 17, after falling from a record $147.4 billion at the end of May, according to the Central Bank.

The Central Bank's reserves may increase by $45 billion or $50 billion between now and the end of the year, Interfax reported earlier in the week, citing Deputy Prime Minister Alexander Zhukov. (Bloomberg)

Pipeline Survey Halted

The Natural Resources Ministry said Thursday that surveying work for an oil pipeline to Asian markets had been halted around Lake Baikal over ecology fears.

Deputy Natural Resources Minister Valentin Stepankov said that surveying work had been conducted outside the limits specified in government-approved guidelines and trees had been felled illegally.

Stepankov sent a letter to Greenpeace Russia, thanking the environmental group for helping to monitor the surveying work. (Reuters)

LUKoil Azeri Project

LUKoil received $180 million in loans from the European Bank for Reconstruction and Development to develop a Caspian Sea natural-gas field and gas pipeline as it expands production of that fuel.

The EBRD is lending LUKoil $110 million for the first stage of developing the Shah Deniz field and $70 million for the South Caucasus Pipeline to transport its gas. (Bloomberg)

Rosneft '04 Net Doubles

Rosneft said earnings more than doubled last year as the price of oil surged and the company sold some assets.

Net income rose to $837 million from $386 million, the company said Thursday. Revenue rose 45 percent to $5.28 billion, including asset sales totaling $240 million, from $3.6 billion last year.

Proven oil reserves increased almost fourfold to 1.27 billion tons from 327.7 million tons last year, after the company bought Yuganskneftegaz, Rosneft said. (Bloomberg)

Rosneft to Up Investment

State-owned oil company Rosneft will almost double investment to $2.8 billion in 2005, after the company bought Yuganskneftegaz, a unit of Yukos, at the end of last year. Rosneft plans to produce 75.4 million tons of oil this year, Rosneft said in a statement Thursday.

Rosneft said it planned to export more than 2 million tons of oil this year through the Caspian Pipeline Consortium's link to a port near Novorossiisk on the Black Sea. (Bloomberg)

Rosneft Cuts Forecast

Rosneft said Thursday that it had cut its 2004 oil output forecast by 3.5 percent in a sign the company is having trouble digesting former assets of its stricken rival Yukos.

Rosneft, which until late last year was a mid-sized 400,000-barrel-per-day producer, emerged in December as the new owner of the key unit of Yukos, Yuganskneftegaz, which is twice as big as Rosneft itself. (Reuters)

Kazakhstan to Invest $2Bln

Kazakhstan will spend $2 billion upgrading its natural gas pipelines over nine years so it can ship more gas from Turkmenistan and Uzbekistan to Russia, Ukraine and Western Europe.

KazMunaiGaz, Kazakhstan's state-owned oil and gas company, is seeking loans from Citigroup and HSBC Holdings to modernize the Opornaya compressor station this year.

That would increase the Central Asia-Russia gas pipeline's capacity by 10 percent to about 60 billion cubic meters per year. (Bloomberg)

First Caspian Tenders in '06

LONDON -- Kazakhstan is likely to issue first tenders for rights to develop its oil and gas riches in the Caspian Sea in the first quarter of 2006, Economy and Budget Planning Minister Kairat Kelimbetov said Thursday.

"The tenders will probably be at the beginning of next year," Kelimbetov said on the sidelines of an energy conference in London.

Asked if the tenders could be held in the first quarter, he said: "I hope so." Kelimbetov said that the date of the future oil tenders depended on certain amendments to Kazakhstan's legislation. (Reuters)

RusAl Considering Merger

The world's third largest primary aluminum producer RusAl may consider merging with aluminum firm SUAL, Vedomosti reported Thursday.

RusAl is considering mergers and acquisitions as an important source of further growth as it has an ambitious goal of becoming the world's No. 1 aluminum producer, Alexander Bulygin, the CEO of RusAl said, Vedomosti reported.

"SUAL is interesting to us as any other aluminum company, the size of which would allow our shareholders to keep control in a joint company after a merger with RusAl," Bulygin said. (Reuters)

$1.2Bln Paper Investment

Paper and board maker Stora Enso plans to invest 1 billion euros ($1.2 billion) in Russia, the Natural Resources Ministry said.

The Finnish-Swedish firm wants to build a pulp plant with a capacity of 1 million tons per year and annual revenues of 500 million euros, the ministry said. (Reuters)

Yamal Official Quits

The deputy governor of Yamalo-Nenetsk, Iosif Levinzon, has quit his post before Novatek, which has gas fields in the region, sells shares to the public, Vedomosti reported Thursday, citing people familiar with the situation.

Levinzon, who is considered one of the major shareholders of Novatek, stepped down to prevent problems for the company, the newspaper reported quoting anonymous sources.

Novatek has faced problems since announcing it would sell shares to the public, the newspaper said. The Yamal region's prosecutor last month opened an investigation into the Yamal Regional Development Fund. The fund, set up by the regional administration, owned 5.6 percent of Novatek. (Bloomberg)

Rostelecom '04 Profits Up

Rostelecom reported a 19.4 percent rise in 2004 revenue to 37.32 billion rubles, in line with market expectations.

A 10-fold surge in net profit in 2004 to 4.30 billion rubles from the prior year's 398 million rubles surprised the market, while operating profit doubled to 5.01 billion rubles from 2.19 billion rubles and the operating margin jumped to 13.4 percent from 7 percent. (Reuters)

Norilsk Audits Reserves

Norilsk Nickel, which makes half the world's palladium and 14 percent of its platinum, has started auditing its reserves of the metals, CEO Mikhail Prokhorov said Thursday.

Prokhorov did not say when Norilsk expected to be able to make the data public. His comments were made at the company's annual meeting of shareholders in Moscow.

President Vladimir Putin signed a decree in March declassifying data on output and stocks of platinum group metals and diamonds. The figures were classified as state secrets under Soviet-era laws because the metals are used to make weapons. (Bloomberg)

TMK Considering IPO

TMK, one of the world's biggest pipe producers, will decide by October or November whether it wants to make a debut share placement on a Western stock exchange, a company spokesman said on Thursday.

Media have reported that TMK, which controls almost 10 percent of the global market in industrial pipes, is thinking of listing up to 20 percent of its stock in London in late 2005 or early 2006 in a float that could bring it $300 million. (Reuters)


Russian Railways, or RZD, which buys about $1.4 billion worth of steel a year, plans to secure cheaper supplies from Magnitogorsk Iron & Steel Works, or MMK, the country's No. 2 steelmaker.

RZD plans to sign an agreement with MMK as early as next week that will reduce prices for third-quarter deliveries by 10 percent to 15 percent, Vladimir Smirnov, a department head at state-controlled RZD, said Thursday. (Bloomberg)

Vekselberg's Municipal Stake

Billionaire Viktor Vekselberg's Integrated Energy Systems plans to buy 25 percent of Russian Municipal Systems, a provider of municipal services in the country's regions, Vedomosti reported Thursday. Integrated Energy will buy the stake from United Financial Group brokerage, the paper said, citing an unidentified official from Integrated Energy. (Bloomberg)